Five card trick: what to look for in today's FD

Coombe’s point essentially matched that of Perryman and Mulcahy. But in mentioning the ‘B’ word – beancounter – he touches a raw nerve that FDs have struggled with for as long as we’ve known them: getting the balance right between “producing the numbers and using the numbers”. A regular part of this discussion has always been the debate about whether an FD even needs to be an accountant. Clearly, most are – and the American tendency of having chief financial officers with MBA degrees (perhaps with an accounting major) rather than a professional accountancy qualification has never really caught on over here.

Time and again we’ve been told about the value of the ethical backbone a professional qualification provides, helping an FD challenge his boardroom colleagues and to prevent the sort of company-destroying shenanigans we’ve seen at Enron and others.

And yet many others over the years have dismissed the need for the FD to be an accountant. “Finance is simply the language of business,” said non-accountant Archie Norman, FD of Kingfisher in 1990. “Finance directors have certain specific responsibilities, but the function should not be a specialist one. My job is to manage high-quality, specialist staff.”

Points decisions
As true as that is, however, we think the argument is won on points by the accountants. Today, the demands of financial management and financial reporting are such that a non-accountant at the helm may – may – lack the necessary education and training that gives him a more intuitive understanding of what’s going on and what’s being reported.

Let’s go back to John Coombe: “We accountants are brought up to be prudent, to only believe what we think to be correct and true,” he said. “We are unlikely to put on coloured shirts and strange ties and take extreme actions that will change the course of business life.”

Coombe’s comments remind us of a story told by Patrick Ponchon who, when we met him for our April 1998 issue, was FD of Xerox Europe. Frenchman Ponchon is a qualified expert comptable but an avowed admirer of British accountants: “They have a technical knowledge which is above the average and their education is quite broad. Honestly, I learned a lot of things here.”